A recent report from the House Committee on Oversight and Accountability indicates that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their pharmacy options. This report follows a 32-month investigation in preparation for an upcoming hearing involving executives from the leading PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket costs for medications. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescription medications in the U.S.
According to the committee’s findings, PBMs have been generating lists of preferred drugs that prioritize higher-priced brand-name medications over less expensive alternatives. The report highlighted emails from Cigna that discouraged the use of cheaper alternatives to Humira, a drug for arthritis and other autoimmune diseases that had an annual cost of $90,000, despite the availability of a biosimilar costing half that amount.
Additionally, the committee revealed that Express Scripts informed patients that filling a prescription at a local pharmacy would be more expensive than obtaining a three-month supply from its affiliated mail-order pharmacy, thereby restricting patients’ choices.
This month, the U.S. Federal Trade Commission released a similar report, noting that increasing concentrations within the market have allowed the six largest PBMs to manage nearly 95% of all prescriptions in the U.S. The FTC expressed concern over the significant power these leaders wield over Americans’ access to affordable medications. It warned that such vertical integration may lead PBMs to favor their own affiliates, potentially harming independent pharmacies and raising drug costs for consumers.
FTC Chair Lina M. Khan remarked that these findings reveal how middlemen may be overcharging patients for essential medications, including cancer drugs, resulting in an additional revenue of over $1 billion for these entities.